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Mnuchin had deeper ties to nonprofits that praised his bank in lucrative merger

01/16/2017 09:25 am ETUpdated
Jan 17, 2018

Steven Mnuchin's family foundation donated to, and Mnuchin himself sat on the boards of, two nonprofits that wrote supportive letters to the Fed when his bank was trying to get a merger approved. The deal earned the Treasury Secretary-designate many millions of dollars. (AP Photo/Susan Walsh)

The deal was helped along by supportive letters written by 14 nonprofits that had received a combined $5.95 million from OneWest's charitable arm in the years before and after the sale, as POLITICO has reported. That helped counter opposition to the merger from advocacy groups.

But it turns out that some of the groups might have had further incentives to speak up about the good citizenship of Mnuchin's bank: The Treasury nominee is also a board member or trustee of at least two of the organizations that backed him up, the LAPD Foundation and Cedars-Sinai Hospital, according to his personal financial disclosure statementmade public earlier this month.

And there are even more connections binding the Treasury Secretary-designate, whose Senate confirmation hearing is scheduled for Thursday, and the two nonprofits: The Steven and Heather Mnuchin Foundation gave them a combined $66,000 from 2012 through 2014, according to the Mnuchin group's Form 990s.Cedars-Sinai received $21,500 and the LAPD Foundation received $44,500.

Asked to comment on these further, not previously reported ties between Mnuchin and two groups that spoke out in favor of the deal, Mnuchin spokesman Barney Keller sent the following statement, which we reprint in full:

The Center for Responsive Politics needs to send their reporters back to Journalism school. You don't need to read Steven's financial disclosure - using this new-fangled tool known as Google, any member of the public can discover Mr. Mnuchin's relationship with Cedar-Sinai [sic], where donations from OneWest bank went to help sick kids, or the LAPD foundation, which helps brave police officers - both highly public relationships that were in place well before the letters to the Federal Reserve. Only in your sick mind would the support of cops and sick children be a conflict of interest in the public sale of a bank. Get a life.

However, neither of these nonprofits includes this information on its website. Mnuchin is notably absent from the LAPD Foundation's Board of Directors page and Cedars-Sinai Medical Center's website and its profile on Bloomberg. (The LAPD Foundation told OpenSecrets Blog that he was listed on its website until his resignation last month, though we could not find such a page using Internet Archive.) A Cedars-Sinai spokesperson said it does not post online members of its board of governors, a group of almost 800 volunteers who help raise funds.)

We don't learn much more looking at these nonprofits' tax filings.

The Los Angeles Police Foundation's IRS Form 990 lists Mnuchin as a board member in 2013 and 2014, the most recent available on Guidestar. Mnuchin reports himself as a trustee on his ethics filing, and says he took the position in 2012. The LAPD Foundation confirmed to us he was on its board of directors until last month, when he resigned.

His name doesn't appear on Cedars-Sinai Medical Center's tax forms for 2014, 2013, or 2012, nor on those of the hospital's Cedars-Sinai Medical Care Foundation during thesameperiod. Mnuchin reported he was on the board of governors of "Cedar Sinai Hospital" since Jan. 2010.

Google, for all its newfangled-ness, really didn't provide much help on this puzzle.

In an email to OpenSecrets Blog, LAPD Foundation Executive Director Cecilia Glassman said that "OneWest Foundation's support of one of the LAPD's vitally important youth programs was the major consideration in LAPD Chief [Charlie]Beck's decision to write a letter to the Federal Reserve." She said she did not know whether Mnuchin, who was on the board at the time, asked for the letter to be written.

"Cedars-Sinai was asked by OneWest Bank to send a letter describing its philanthropic contributions to Cedars-Sinai," said Sally Stewart, Cedars-Sinai media relations manager, in an email to OpenSecrets Blog. "The request that Cedars-Sinai send a letter was not in any way a condition for any donations Cedars-Sinai received from OneWest Bank." Stewart also said that the names of governors aren't required to be reported on IRS tax forms.

Mnuchin, a former Goldman Sachs partner and hedge fund manager, was paid severance totaling almost $11 million when he left the company last year in a management shakeup. He still holds a stake of about $100 million in CIT, which his ethics agreement says he'll divest within 90 days of being confirmed for the Treasury job.

And he was paid more than $28 million by OneWest and CIT in addition to the severance in the 12 months covered by his disclosure statement. Overall, according to the document, Mnuchin is worth at least $166 million; it is impossible to say precisely because the values of assets and other holdings or debts are given in ranges.

In addition, the agreement makes clear that because of a "holdback" provision involving cash owed Mnuchin but reserved by the company for contingent debts, and a restrictive covenant he signed, he will not participate in matters affecting CIT Group until at least mid-2018 without receiving an ethics waiver.

In addition to the merger, Mnuchin is expected to be questioned at his confirmation hearing about accusations of redlining and wrongful foreclosures by OneWest during the time he was chairman.

Researchers Alex Baumgart, Robert Maguire and Anna Massoglia contributed to this report. Jan. 17: This post has been updated to include a statement from Cedars-Sinai, as well as a clarification about its board of governors.